To Our Valued Customers:

 

Market Conditions - With the significant number of blank sailings in April & May coupled with an unexpected spike on inventory replenishment in some retail sectors an extensive backlog developed in the market place. An additional of priority loading PPE added additional pressure on capacity, especially into the LA/LGB market. Many carriers are rolling containers as backlogs in places like Pusan and Shanghai increase. We are even experiencing rolls of two weeks as some shipments are rolled to the following week that unfortunately coincides with a scheduled blank sailing.

The market initially anticipated improving capacity condition as we moved through June as extra loader vessels and fewer blank sailings were expected to ease the capacity shortage. Unexpectedly any easing of capacity shortages disappeared as ocean carrier alliances announced another substantial round of blank sailings for the months of July and August. The additional blank sailings will likely prolong capacity shortages through at least early August. We expect ocean alliances to closely monitor shipper volume forecasts and deploy extra capacity as necessary rather than deploying as scheduled and hope for good vessel utilization. This logic is now in the past as ocean alliances have enough scale to quickly pull or add capacity based on short-term volume forecasts rather than historical trends.

 

Market Rates – Tight capacity will continue to keep upward pressure on ocean freight rates as ocean carriers clear out the backlog of containers left at the piers in Asia. Another substantial General Rate Increase was announced to the market for June 15th with some ocean carriers eyeing a $600 per 40’ container increase. Ultimately how fast the backlog of containers clear and strength of new booking demand will determine how much of the increase goes through in the market. We expect East Coast rates to trend higher as we move towards July due to all carrier alliances having blank sailings during the week of June 28th.

 

Ocean Carriers Peak Season Announcements - Several carriers this week announced peak season surcharges on the Transpacific with effective dates as early as June 15th. The average proposed peak season surcharge is $600/40’. Make no mistake, the peak season surcharge is a by-product of the blank sailings and not because of seasonal freight volume increases that occur in late summer due to year-end holiday season sales. The gap between long term fixed rate contracts and market rates will widen to approximately $1000.00 per 40’container on some trades and possibly higher if the June 15th proposed General Rate Increase goes through in the market. Expectations are for ocean carriers to continue limiting fixed-rate capacity until the peak season surcharge is effective later this month.

 

East Coast Capacity Expected to Tighten in July - Blank sailings in late June on the East Coast will also impact service reliability and some carriers have announced weight restrictions for cargo via the Panama Canal effective July 1st. All three ocean carrier alliances have a blank sailing during the last week of June (service details provided below) with four blank sailings announced in the market.

 

July Blank Sailings - Below are the announced blank sailings for the month of July and we will continue to provide the latest updates as we are expecting to hear additional announcements from OCEAN & 2M alliances in the coming weeks.

Transpacific – West Coast

Week of June 28th

THE Alliance - Colombo, Port Kelang, Singapore, Cai Mep, Haiphong // Los Angeles, Oakland THE Alliance - Shanghai, Ningbo // Los Angeles
THE Alliance - Hong Kong, Yantian, Shanghai, Busan // Vancouver, Seattle
THE Alliance - Qingdao, Ningbo, Shanghai, Busan // Prince Rupert, Tacoma, Vancouver OCEAN Alliance – Hong Kong, Yantian, Ningbo, Shanghai // Prince Rupert, Vancouver

Week of July 5th

THE Alliance - Xiamen, Yantian, Kaohsiung, Keelung // Los Angeles, Oakland
THE Alliance - Shanghai, Ningbo // Los Angeles
OCEAN Alliance - Fuqing, Nansha, Hong Kong, Yantian, Xiamen, Shanghai // Los Angeles, Oakland

Week of July 12th

THE Alliance - Colombo, Port Kelang, Singapore, Cai Mep, Haiphong // Los Angeles, Oakland THE Alliance - Shanghai, Ningbo // Los Angeles
THE Alliance - Hong Kong, Yantian, Shanghai, Busan // Vancouver, Seattle
THE Alliance - Qingdao, Ningbo, Shanghai, Busan // Prince Rupert, Tacoma, Vancouver

Week of July 19th

THE Alliance - Xiamen, Yantian, Kaohsiung, Keelung // Los Angeles, Oakland THE Alliance - Shanghai, Ningbo // Los Angeles

Week of July 26th

THE Alliance - Colombo, Port Kelang, Singapore, Cai Mep, Haiphong // Los Angeles, Oakland THE Alliance - Shanghai, Ningbo // Los Angeles
THE Alliance - Hong Kong, Yantian, Shanghai, Busan // Vancouver, Seattle
THE Alliance - Qingdao, Ningbo, Shanghai, Busan // Prince Rupert, Tacoma, Vancouver

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THE Alliance:  Yangming, ONE, Hapag Lloyd, HMM 

Ocean Alliance: COSCO, OOCL, CMA, Evergreen, APL

2M: Maersk, MSC

 

Transpacific – East Coast & Gulf (via Panama and Suez Canal)

Week of June 28th

THE Alliance - Ningbo, Shanghai, Busan, Panama // Savannah, Norfolk, Charleston
2M Alliance - Laem Chabang, Singapore, Tanjung Pelepas, Colombo // New York, Norfolk, Charleston, Savannah, Miami
OCEAN Alliance - Qingdao, Ningbo, Shanghai, Busan, // New York, Norfolk, Savannah
OCEAN Alliance – Shanghai, Ningbo, Xiamen, Yantian // Houston, Mobile

Week of July 5th

2M Alliance TP11 Service – Laem Chabang, Singapore, Tanjung Pelepas, Colombo // New York, Norfolk, Charleston, Savannah, Miami

Week of July 12th

2M Alliance TP11 Service – Laem Chabang, Singapore, Tanjung Pelepas, Colombo // New York, Norfolk, Charleston, Savannah, Miami
OCEAN Alliance – Qingdao, Ningbo, Shanghai, Busan // Savannah, Charleston, Boston, New York

Week of July 19th

2M Alliance TP11 Service – Laem Chabang, Singapore, Tanjung Pelepas, Colombo // New York, Norfolk, Charleston, Savannah, Miami

Week of July 26th

2M Alliance TP11 Service – Laem Chabang, Singapore, Tanjung Pelepas, Colombo // New York, Norfolk, Charleston, Savannah, Miami

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THE Alliance:  Yangming, ONE, Hapag Lloyd, HMM 

Ocean Alliance: COSCO, OOCL, CMA, Evergreen, APL

2M: Maersk, MSC

 

 

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